Import price decline slows in December

Korea’s import prices in annual terms eased for the 16th consecutive month in December, central bank data showed yesterday, but at the slowest pace in 15 months as crude oil prices edged up.

Import prices in won terms edged down 3.5 percent from a year ago, compared to a 4.9 percent decline in November, according to Bank of Korea data.

December’s fall was the slowest since prices edged down 2.2 percent in September 2012. Import prices jumped 0.4 percent in December.

Crude oil prices rose 1.0 percent in December on an annual basis, compared to a 1.7 percent fall in November. The won rose 1.9 percent against the greenback last month, compared with a gain of 2.3 percent in November, a central bank official said. This in turn led to import prices to fall at a slower rate in December.

Over 2013, import prices dropped 7.3 percent as global raw material prices stayed low while the won gained 1.4 percent against the dollar.

Export prices, also in won terms, edged down 2.1 percent compared to a year ago in December. Last year, export prices fell 4.3 percent. Month-on-month, export prices dropped 0.3 percent in December compared to November. The average won-dollar exchange rate was 1,062.82 won against the greenback in November while it appreciated to 1,056.67 won ($0.99) in the following month.

Inflation for all of 2013 stood at 1.3 percent, well below the Bank of Korea’s target band of between 2.5 percent and 3.5 percent, thanks in part to low import prices. The Bank of Korea said last week, however, it sees inflation moving into the target range in the second half of 2014 as the economy improves. Reuters